Report: Pa. House bill to abolish school property taxes would fall $1.5 billion short

October 1, 2012 9:15 AM

By Tom Barnes Pittsburgh Post-Gazette

HARRISBURG -- A House bill to eliminate all school property taxes would fall $1.5 billion short of generating enough money to replace the revenue existing property taxes raise, according to a report from Pennsylvania's Independent Fiscal Office.

"The IFO has confirmed the views I held in June," when the bill was tabled, said Rep. Tim Briggs, D-Montgomery, who released the report over the weekend. "House Bill 1776 simply does not raise the revenue it claims to provide."

Sponsors of the bill estimated it would raise about $10 billion a year by increasing the state's income tax rate to 4 percent from 3.04 percent and the state sales tax rate to 7 percent from 6 percent.

A special House committee studying property taxes will meet today to discuss the report.

If it's correct, $11.5 billion would be needed to replace all school property taxes and the state's income and sales tax rates would have to go up even more than the bill proposes.

Senior citizens in particular have urged legislators to get rid of school property taxes. But the political danger of a sharp increase in the other taxes has prevented lawmakers from doing anything.

State Rep. Jim Cox, R-Berks, said that in light of the report, his bill may need to be tweaked a bit, such as raising the state personal income tax rate to 4.4 percent. He thinks that would close the $1.5 billion gap. The increase in the sales tax, along with eliminating certain current exemptions, would remain.

But he said he's not giving up on his effort to reduce property taxes. He will push for a Finance Committee vote and House action on the bill before the Nov. 6 election. But others, such as Rep. Briggs, said because of the few remaining days in the current session, the property tax issue almost certainly will be put off until the 2013-14 session starts in January.
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